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May
2000
" What do the Major Brokers agree is the best investment
in the next 9 months?"
The
large brokers and institutional investors have teams of
analysts which are charged with the responsibility of monitoring
a particular sector of the market. Essentially, they make
plant visits, have roundtable conferences with CFO's, and
determine how future earnings will be affected by current
backlogs, production efficiencies, supply and demand conditions,
technological innovations (R&D)as well as cash flows
and extraordinary income/expenses.We commonly call this
"inside information", and when done illegally
within the corporation the SEC gets involved.
For example, they may have analysts who monitor
these sectors:
1. Biotech - gene research
2. Internet - e-commerce,Business to business,
3. Utilities - electric, phone, waste management
4. Energy - oil, gas exploration, services, transport.
5. Chemical - research, mining, plastics, food products,etc
6. Paper, pulp - fine papers, corrugated, raw pulp exports
7. Graphic Communications -print, publishing,packaging
8. Retail-consumer stores
9. Steel -production, imports
10. Financial services - brokers,etc
This could be a long list, but you get the idea.
The next hottest sector for investing:
I am convinced that Energy is the next sector to
return a high level
of stock appreciation in the next 9-12 months.
If you examine the money flows
into this sector, they are leading the pack at this point.
Just like
"deepthroat" told Robert Redford in the infamous
Watergate movie "follow
the money and it will lead you to the truth", I believe
that following the money is
one way the average investor/trader can take advantage of
the collective
intelligence of the analysts/market. The saying "the
market is always right"
still rings true after all these years. You can take advantage
of all the legwork
done by the analysts by simply finding out where they are
using their capital.
My suggestion: wait for the market to stabilize and then
invest in
Energy sector and SELECTIVE Technology and Internet stocks
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